It’s Incredible What Your Clients Won’t Tell You – Market Research

… but if you could listen to their hidden conversations, you might be amazed at what you discover

Author’s note: This was one of the most profoundly insightful client engagements that I have had. It was clear that a 2-year investment in the strategy was not ever going to work — the answer why was hidden in plain sight. They just needed to ask.

Recently I was called to advise a technology company (TC) on a thorny problem. TC sold their product through a value-added reseller (VAR), who would then add it to their technology platform to provide a customized solution to their business customers. This relationship effectively made the VAR, and specifically their sales team, TC’s only real client. Unless the VAR generated sales at the retail level, TC’s product would sit idle on their shelves.

… all failed to deliver significant sales.

TC had signed the VAR agreement almost two years earlier, but now with the anniversary date of the contract approaching, it was readily apparent that the VAR’s sales team had generated no significant sales. Multiple tactics to prod the VAR to sell the product had been tried. Generous product margins, salesperson contests and spiffs, as well as high budget marketing promotion and support, had all failed to deliver significant sales. Everyone blamed the “lazy” sales team.

As a last resort, TC approached me to audit the sales and marketing systems to see if there was a hidden glitch that could be fixed. I started this project at the point where I always find I get the most traction, by interviewing the people in the field. These are the folks who are closest to the action and the ones who have the deepest insights. This geography is where real market research begins.

John Pierpont Morgan, American Financier

Field level interviews (primary market research) like these cannot be done by simplistic, closed end, questioning. You must engage your subject to reveal not only the superficial causes and effects, but also deep probe the functional, emotional, and relationship motives for why something is or is not working. You must also give these people a setting of safety, trust, and confidentiality so they can give you the facts and reasons, but also the truth. J.P. Morgan, the famed American financier, had a famous quote on this topic: “A man always has two reasons for doing anything: a good reason and the real reason.”

It took less than a dozen field interviews to establish a pattern for why product sales were stalled, and why all of the tactics used to motivate the VAR’s sales team had fizzled.

The discovery

Here are the highlights of what we discovered:

… the sales team did not care what the commision on the product was.

TC’s product was considered by the VAR’s sales staff to be a small, luxury, nice to have but ABSOLUTELY NOT NECESSARY add-on to a much larger core system they were trying to sell. While the product sold for $10,000 – $20,000, the core system always had a price tag of several hundred thousand dollars to as high as a few million dollars. As a result, the salespeople were very reluctant to “sell” what they considered a small add-on that would distract their customer from the primary objective of buying the core system.

In this scenario, the sales team did not care what the commision on the product was. Even if it were 100% of the product sales price, it would still be a fraction of what they could earn on selling the core system. But if the product distracted the customer it could cost them the entirety of the core system sale.

Although the product worked, it was a beast to configure and install. Estimated times for implementation were always being extended, and the system also had a lengthy “break-in” period.

The documentation and marketing materials were technical and difficult to understand. The sales team was confident the information would only confuse the customer and further complicate the sale of the core system.

Finally, TC’s president was a close friend of the VAR’s owner. None of the sales staff felt safe voicing their concerns lest there be repercussions.

A new strategy based on this market research

Culturally, the VAR’s sales staff will always be hostile to the product.

From these primary market research insights, it was clear that NONE of the VAR’s sales problems could be solved by increasing sales commisions, advertising spending, or any of the hundred other ways marketers accelerate sales. The problem had to be addressed at the strategic level, starting with:

A redesign of the product’s configuration and implementation process to speed deployment.

Simplifying the system documentation and marketing materials.

Choosing another sales channel than VARs. Culturally, a VAR’s sales staff will always be hostile to the product.

But here’s the real market research insight

Your customers (in TC’s case, the VAR’s sales staff) have a deep understanding of what your products and services really mean to them. In this situation, TC’s executive had different levels of awareness of the issues that were absolute show stoppers for the VAR’s sale team. But because they did not probe and deeply question WHY there was a sales problem, they wrongfully blamed the “laziness” of the sales team.

It is only by having real conversations, in safe settings, that you will be able to download the customer’s knowledge to understand how to improve your offering. To command a market, deep customer empathy must be the goal. Those who know their clients best win.

About Kurian Tharakan

Kurian Mathew Tharakan is the founder of sales and marketing strategy firm StrategyPeak Sales & Marketing Advisors, and a 27 year veteran of the sales and marketing industry. He has consulted for companies in numerous sectors, including Manufacturing, High Technology, Software, Non-Profit, and the Life Sciences. In addition to his consulting practice, he is also an Executive in Residence at two business accelerators, NABI and TEC Edmonton, where he assists clients with their go to market strategies. Prior to StrategyPeak, Mr. Tharakan was vice-president sales & marketing for an enterprise class software firm where his team achieved notable wins with several members of the US Fortune 500. Previous to his software experience, Mr. Tharakan directed the sales and marketing programs for the Alberta practice of an international professional services firm.